Grayscale Files for First U.S. Bittensor ETP as Decentralized AI Tokens Enter Market
Grayscale has submitted a filing to the U.S. Securities and Exchange Commission (SEC) for the first Exchange Traded Product (ETP) in the United States focused on Bittensor, a decentralized artificial intelligence (AI) network token. This move marks a notable development in the evolving digital asset landscape by potentially bridging decentralized AI tokens and regulated financial markets.
What happened
Grayscale, a prominent digital asset manager, has filed with the SEC to launch an ETP based on Bittensor, a token that supports a decentralized AI protocol. Bittensor functions by incentivizing participation in AI development through its native token, which also underpins governance and rewards within the network. The filing signals Grayscale’s intention to provide regulated investor access to decentralized AI tokens through a traditional investment vehicle.
This filing was publicly reported by CoinDesk on December 30, 2025, and corroborated by The Block. Both sources emphasize that this would be the first U.S. ETP focusing exclusively on Bittensor and, more broadly, on decentralized AI tokens as a distinct asset class within the digital ecosystem. Unlike established cryptocurrencies such as Bitcoin or Ethereum, decentralized AI tokens represent a newer category, tied directly to AI network participation and governance rather than primarily serving as currency or store of value.
Industry commentary from CoinDesk and The Block interprets Grayscale’s filing as an indicator of growing institutional interest and legitimacy for decentralized AI tokens. Analysts suggest that packaging Bittensor tokens into an ETP could lower entry barriers for traditional investors who may be reluctant to engage with direct crypto exchange participation or custody arrangements. However, regulatory experts caution that the SEC’s ultimate response remains uncertain, as decentralized AI tokens currently occupy a regulatory gray zone between securities and utility tokens.
Why this matters
The introduction of a Bittensor-focused ETP by Grayscale could represent a significant structural shift in how decentralized AI tokens are accessed and perceived by the broader financial market. By offering these tokens within a regulated, familiar product format, Grayscale could facilitate broader investor participation beyond crypto-native audiences, potentially accelerating mainstream adoption of decentralized AI assets.
This development also highlights the evolving intersection of artificial intelligence and blockchain technology, where tokenized incentives are used to foster decentralized AI networks. The ability to invest in such networks via an ETP aligns with ongoing efforts to integrate digital assets into traditional finance, expanding the asset class beyond established cryptocurrencies.
From a regulatory perspective, Grayscale’s filing draws attention to the SEC’s role in defining the legal framework for decentralized AI tokens. The regulatory classification of these tokens—whether as securities, utilities, or a new category—will have broad implications for investor protections, disclosure requirements, and market structure. The filing thus serves as a potential test case for how decentralized AI tokens will be treated under existing securities laws or whether new guidelines will be necessary.
What remains unclear
Despite the confirmed filing and its significance, several critical questions remain unanswered. The SEC’s stance on the Bittensor ETP filing is not yet public, leaving open whether the product will receive approval and under what conditions or modifications. The regulatory framework applicable to decentralized AI tokens remains ambiguous, particularly regarding how existing securities laws apply to their unique governance and utility features.
Details about Grayscale’s target investor demographics for the Bittensor ETP are not disclosed, nor is there information on how custody, valuation, and liquidity challenges specific to decentralized AI tokens will be managed within the ETP structure. Furthermore, there is limited data on market demand or investor sentiment toward decentralized AI tokens and related financial products, making it difficult to assess potential adoption rates or market impact.
Additionally, the filing and secondary sources do not address risks inherent to decentralized AI tokens, such as protocol vulnerabilities or governance disputes, and how these risks might be mitigated or disclosed to investors within a regulated product.
What to watch next
- The SEC’s formal response to Grayscale’s Bittensor ETP filing, including any approval, rejection, or requests for amendments.
- Regulatory developments or guidance clarifying the classification and treatment of decentralized AI tokens under U.S. securities laws.
- Disclosures from Grayscale regarding the operational aspects of the ETP, particularly custody solutions, valuation methodologies, and liquidity provisions.
- Market data on investor interest and demand for decentralized AI tokens and related ETPs as they become available.
- Broader industry reactions and potential filings for similar products by other asset managers focusing on decentralized AI or related token categories.
Grayscale’s filing for a Bittensor-focused ETP marks a noteworthy step in integrating decentralized AI tokens into mainstream financial markets. While the move underscores growing institutional attention to this emerging asset class, significant regulatory and operational uncertainties persist. The SEC’s forthcoming decisions and clarifications will be pivotal in shaping how decentralized AI tokens are incorporated into regulated investment vehicles and the broader digital asset ecosystem.
Source: https://www.coindesk.com/business/2025/12/30/grayscale-files-for-first-u-s-bittensor-etp-as-decentralized-ai-gains-momentum. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.